Lufthansa, Wizz Air to revamp

Lufthansa pledged tough restructuring, even as budget rival Wizz Air upgraded a Middle Eastern expansion - underscoring the contrasting fortunes among airlines grappling with the coronavirus crisis.

The pandemic has strained airline balance sheets and darkened the outlook for demand especially for long-haul travel, weakening some big names while handing opportunities to leaner rivals.

Lufthansa warned that deep cutbacks and asset sales will be necessary to pay off 9 billion euros ($10.1 billion) in German rescue aid, with more to come from Austria and Belgium.

“In view of the very slow recovery in demand, we must now take far-reaching restructuring measures,” Chief Executive Carsten Spohr said as the company plunged to a deep quarterly loss.

The group, whose carriers also include Swiss, Austrian and Brussels Airlines, expects a significant 2020 earnings decline and has begun talks on job cuts expected to impact as many as 20,000 positions.

Smaller Hungarian player Wizz Air sounded upbeat about the recovery as it assigned more planes to its new Abu Dhabi joint venture, maintaining fleet plans after years of breakneck growth.

“Whatever we can fly we’re going to be flying, because we’ve seen that there is actually demand out there,” Wizz CEO Jozsef Varadi said, unveiling a record pre-crisis annual profit.

As lockdowns ease, airlines of all stripes are restoring some flights while contending with a patchwork of lingering restrictions and consumer wariness.

They are also cutting long-planned capacity for 2021 onwards - a thornier task for network carriers taking aid from governments determined to defend their airports.

Reuters